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Project Information

Memorandum

Paradeep

Plastic Park Odisha

Odisha Industrial Infrastrcture Development

Corporation

Project Information Memorandum – Paradeep Plastic Park

1

Table of Contents

1. Project Background............................................................................................................. 2

2. Plastic Industry Profile........................................................................................................ 2

3. SPV Profile ......................................................................................................................... 3

4. Odisha State Profile ............................................................................................................ 4

5. Proposed Business Plan for the Park .................................................................................. 7

6. Land and Site Analysis ....................................................................................................... 9

7. Proposed Master Plan ....................................................................................................... 10

8. Project Cost and Means of Finance .................................................................................. 12

9. Policy Support and Incentives .......................................................................................... 13

10. Project O&M and Implementation Framework ................................................................ 13

11. Statutory Clearance/ Approval Status ............................................................................... 15

12. Project Impact ................................................................................................................... 16

Note:

This Project Information Memorandum presents only indicative information on proposed

Seafood Park components and development details. There can be some changes during actual

implementation based on demand from the concerned stakeholders


2

1. Project Background (a) Department of Chemicals and Petrochemicals (DCPC), Ministry of Chemicals &

Fertilisers (MoCF), Government of India (GoI) has formulated the ‘Scheme for

setting up of Plastic Parks” with a view to synergise and consolidate the capacities

in Indian Plastic Industry through cluster development.

(b) Government of Odisha through its “Odisha Industrial Policy, 2007” has mandated

Odisha Industrial Infrastructure Development Corporation, (IDCO) with

promoting the PCPIR at Paradeep on PPP mode and further suggested that

concerned State Government Agencies and Central Institute of Plastic &

Engineering Technology (CIPET-Bhubaneswar) shall also be involved. Govt. of

Odisha expects to attract investments of Rs. 2.78 trillion with the Paradeep PCPIR

and other related proposals in the region.

(c) IOCL who is in the process of setting up a three lakh barrels per day refinery at

Paradeep is the Anchor Tenant for the PCPIR.

(d) The proposed Plastic Park shall be an important milestone in this direction. The

IOCL refinery, on completion shall be single and major source of entire raw

material requirement for the proposed Plastic Park. It is expected that bulk of the

demand for the plastic products to be manufactured in the proposed Plastic Park

would come from the Paradeep PCPIR itself

2. Plastic Industry Profile (a) The entire chain in the Plastic industry can be classified into (A) manufacturing of

Polymers and is called “upstream” and (B) conversion of polymers into plastic

articles and is known as “downstream”.

(b) A Wide variety of plastics raw materials are produced from petrochemicals to meet

the material needs of different sectors of the economy. These polymeric materials

are broadly categorized as commodity, engineering and specialty plastics

(c) Worldwide Plastics Industry witnessed a steady growth which is reflected in the

increased consumption figures of all types of Plastics materials. Asia has been

world’s largest plastics consumer for several years, accounting for about 30% of

the global consumption excluding Japan, which has share of about 6.5%. Next to

Asia is North America with 26% share, then Western Europe with 23% share in

the global market.

(d) The key growth segment remains “Packaging” which accounted for over 35% of

the global consumption. Amongst the individual Plastics Materials, Polyolefin

accounted for 53% of the total consumption, (PE with 33.5%, PP with 19.5%)

followed by PVC – 16.5%, PS-8.5%, PET & PU - 5.5%, Styrene copolymers (ABS,

SAN, etc) – 3.5% other engineering & high performance & specialty plastics,

blends, alloys, thermosetting plastics – 13%.

(e) The Indian plastics market is comprised of around 25,000 companies and employs

3 million people. Barring 10% - 15% of the firms, which can be classified as

medium scale operations, all the units operate on a small-scale basis. The top 100

players account for just 20% of the industry turnover. However, the degree of


3

fragmentation is large and despite the small size of operations of the players, they

are able to operate profitably. Further, the high growth in demand ensures that the

market is able to absorb the excess capacity in quick time. Overall, the degree of

competition can be considered high in the Indian plastic processing industry.

(f) The State of Gujarat in Western India is the leading plastics processing hub and

accounts for the largest number of plastics manufacturers, with over 5,000 plastics

firms.

(g) The growth rate of the Indian plastics industry is one of the highest in the world,

with plastics consumption growing at 16% per annum (compared to 10% p.a. in

China and around 2.5% p.a. in the UK). With a growing middle class (currently

estimated at 50 million) and a low per capita consumption of plastics, this trend is

likely to continue. The Plastindia Foundation estimates that per-capita plastics

consumption in India is likely to reach 16kg by 2015.

(h) The main Plastic processing technologies in India is as tabulated in the below table.

Table 1: Processing Technologies

Technology Percentage

Injection Moulding 58%

Extrusion 30%

Blow Moulding 10%

Others 2%

(Source: Plastic Industry in India, British Plastic Foundation)

(i) A Plastic Polymer and allied cluster (PPAC) is operating at Balasore which is

approximately 125 KM from Paradeep and which was developed by IDCO in

phases in the outskirts of Balasore town in Ganeswarpur, Somnathpur and

Balgopalpur in Remuna Block. The industrial estates in the above three locations

form the three nodal centres for PPAC where most of the industrial activities are

concentrated. GoI through its IIUS scheme has also assisted for developing this

Cluster.

(j) Currently, around 100 units are operating from the cluster. Among the significant

units, majority are polymer based. Jaiswal Plastics Ltd, Jagdamba Polymers,

Gampas Plastech, OEL, Kumar Ceramics, Birla Tyres, Balasore Alloys, Emami

Paper and Oripol are some of the major operating units.

(k) The industries manufacture PVC pipes, molded furniture’s woven sacks etc for raw

material the units are dependent on western India market. However with the

availability of feedstock in PCPIR they shall procure necessary PVC resins, HDPE

resins etc from Paradeep.

3. SPV Profile (a) Project will be domiciled in the SPV, Paradeep Plastic Park Limited (PPPL)

(b) The SPV has been incorporated as a Public Limited Company of the State

Government in June 2013 and The earmarked land has been transferred to SPV


4

4. Odisha State Profile (a) Odisha is located in the east of India. It is surrounded by the states of West Bengal

to the north-east, Jharkhand to the north, Chhattisgarh to the west and north-west,

Telangana to the south-west and Andhra Pradesh to the south

(b) Odisha has 485 km of coastline along the Bay of Bengal on its east, from Balasore

to Ganjam

(c) It is the 9th largest state by area with a geographical area of 1,55,707 sq. km which

constitutes 4.87% of total land area of India, and the 11th largest by population

with the population of 41,947,358

(d) Odisha economy has grown at a modest rate of 5.6% at 2004-05 prices in 2013-14.

As per the Advance Estimates, the anticipated growth rate of Odisha in 2014-15 is

8.78% at Market Prices in real terms at 2004-05 base. The anticipated growth rate

is 8.08% as per factor cost (9.02% at current Market Prices)


5

Figure 1: Real Growth rates (%) of GSDP for Odisha

(e) During the year 2014-15, the share of the Service Sector is expected to be 51.16%,

that of the Industry Sector 33.45% and that of the Agriculture Sector 15.39% in

real terms at 2004-05 prices

Figure 2: Sector Composition (%) of Odisha Economy

(Source: Economic Survey of Odisha)

(f) Per capita income is an important indicator of standard of living of the people. The

per capita income (real NSDP) of Odisha during 2014-15 is estimated at Rs. 28,384

as per the advance estimate which accounted for a growth rate of 7.31% over 2013-

14.

(g) Industry sector in Odisha has emerged as a major driver of State’s economy in

recent decade. As per the advanced estimates for the year 2014-15, the share of the

broad Industry Sector to GSDP of Odisha is 33.44% as against 33.08% for the year

2013-14

6.58

11.9811.25

4.95

3.63

9.24

4.493.93

2.21

8.78

0

2

4

6

8

10

12

14

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

(AE)

GSDP real growth rate (%)

23.49 22.97 20.75 19.57 18.50 19.07 17.99 17.20 18.39 16.30 15.39

34.12 33.14 35.65 37.73 36.86 34.32 34.35 34.21 32.72 33.08 33.45

42.39 43.89 43.61 42.70 44.64 46.61 47.66 48.59 48.89 50.62 51.16

0.00

20.00

40.00

60.00

80.00

100.00

120.00

2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15

(AE)

Dynamics of Composition (%) of

Odisha's Economy

Agriculture Sector Industry Sector Service Sector


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(h) During the year 2014-15, the share of the manufacturing subsector is 12.57% and

that of the mining and quarrying subsector stands at 6.31% to GSDP of Odisha

(i) The broad sector has grown in real terms at 2004-05 prices at 6.60%, the growth of

the manufacturing subsector being 4.19% and that of the mining and quarrying

subsector only 2.30%

Figure 3: Number and Investment of Large Industries in Odisha in 2013-14

(Source: Economic Survey of Odisha)

(j) Odisha Industrial Policy Resolution (IPR), 2015 provides a robust policy

framework for industrial promotion and investment facilitation in the State. IPR

2015 offers a number of incentives and policy directives with an objective to

accelerate the pace of industrial growth in India

(k) Odisha Industries (Facilitation) Act, 2004 has been enacted and the Odisha

Industries (Facilitation) Rules, 2005 have been framed and issued with a view to

ensure single window clearance system in the State

(l) If the estimated demand is compared with availability, the State has had a

constituent surplus. As regards to the supply of power, there are three sources:-

the State

the Center

Captive Power Plant by major industries

(m) In 2013-14, the State’s share was 52% and that of the Central sector was nearly

42%. The remaining 6% came from Captive Power Plants and other sources

(n) Odisha’s road network is 3.3 million km long and carries 65% of freight and 80%

of passenger traffic. The road network of the State consists of national highways,

state highways, major district roads and village rural roads

77788.6

6813.12

3748.86

3624.32

0 10000 20000 30000 40000 50000 60000 70000 80000 90000

Engineering and metal based (147)

Glass and ceramic (25)

Chemcial and allied (14)

Others (27)

Investment Amount (Rs. Crores)


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(o) Railway routes pass through 23 districts of the State, excluding Boudh, Deogarh,

Kandhamal, Kendrapara, Malkangiri, Nabarangpur and Nayagarh. By the end of

2013-14, the State had 2540 km of railway lines. Railway density (railway route

length per thousand sq. km) in the state is around 16 km, while national railway

density is around 20 km

(p) There is presence of major ports at Paradeep and Gopalpur. Being a maritime State

with 480 km coastline, it has 13 potential sites for development of minor ports

(q) Telecom acts as a stimulus for the development process. The telecommunication

network in Odisha has vastly expanded over the years. During 2013-14, there were

2.55 telephone subscribers in the state, which is about 2.78% of that of India

5. Proposed Business Plan for the Park (a) The main objectives for promotion of the Plastic Park is to make it a state-of-art

manufacturing base for the downstream plastic industry comprising conversion of

polymers into plastic articles with support facilities ranging from warehouse for

raw material and finished products, simulation and testing facilities as well as

finishing and packing under one roof.

(b) The Park would thus have units engaged in injection moulding, blow moulding and

extrusion moulding and shall cater to the requirements of a wide array of

applications like agriculture, infrastructure, automobile, construction, consumer

goods, telecommunication, packaging, healthcare etc., for export and domestic

market

(c) The raw materials for the plastic processed articles are the polymers in the form of

granules made out of resins and compounds manufactured in the “upstream”

industry. The “upstream” industry process flow resulting in polymers is presented

in the figure below.


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Figure 4: Manufacturing Process for Raw Material for Downstream Industry

(d) These following polymers form the basic raw material for the “downstream” plastic

industry as listed below and are made available in the form of granules/ resins etc.

(i) Polyester

(ii) Polyvinyl Chloride (PVC)

(iii) Low Density Polyethylene (LDPE)

(iv) Linear Low Density Polyethylene (LLDPE)

(v) High Density Polyethylene (HDPE)

(vi) Polystyrene

(vii) Nylon

(viii) Polycarbonate

(ix) Polybutadiene

(x) Acrylic Fibre

(xi) Polyacrylates

(xii) Polypropylene

(e) IOCL the Anchor Tenant at Paradeep, in its Phase-I A along with the refinery using

its FCC streams is setting up a Poly Propylene Unit through gasification process

with a production capacity of 7 lakhs tons per annum and a PVC Unit with

production capacity of 6 lakhs tons per annum.

Fractional Distillation & Selective Absorption

Polyacrylates

DMT

Polyester

Ethylene

Glycol

HDPE/ LLDPE

Ethylene

Di-Chloride

Vinyl

Chloride

LDPE

Polybutadiene

Ethyl

Benzene

Adipic

acid

Nylon

PC

HMD

Styrene

Polystyrene Acrylic Fibre PP

Bisphenol A

DMC/

COCl2

Polyvinyl Chloride

Acrylates

Acrylonitrile

H2SO4

NH3

NH3

Alcohol

Propylene p-Xylene Butene-1 Benzene Butadiene Ethylene

Crude oil/ Petroleum

Naphtha/ Natural Gas


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(f) In the phase–II IOCL shall set up a Naphtha Cracker unit producing Ethylene and

Propylene with capacity of 10 lakh tons per annum and 5 lakhs tons per annum

respectively.

6. Land and Site Analysis (a) The Plastic Park is proposed to be located near Siju Village in Kujanga Tehsil of

Jagatsinghpur District in Odisha State on 120 Acres of land to be carved out from

the 474 Acres of Land available with IDCO

(b) The site is about 2.5 Km from NH-5A in Siju Village in Kujanga Tehsil,

Jagatsinghpur District

(c) The site at present is directly accessible from the IOCL Main Road connecting

NH-5A and IOCL Refinery. IDCO further proposed to develop a 150’ wide road

from NH-5A providing another direct access to the site.

Figure 5: Satelite Image of Site for Paradeep Plastic Park

Figure 6: Satellite Image of IDCO Land in the Project Site


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(d) The proposed location for the Plastic Park is well connected with road, rail and air

connectivity and is strategically placed to cater to the needs of the hinterland as

well as major industrial clusters across the State and Country.

NH-5A : 2.5 Km

SH 12 : 3 Km

Nearest Bus Terminal @ Paradeep : 5 Km

Rail connectivity @ Paradeep : 3 Km

Sea port @ Paradeep : 10 Km

Nearest Airport @ Bhubaneswar : 120 Km

Paradeep PCPIR : 1 Km

Paradeep IOCL Refinery : 5 Km

(e) The site of 120 acres is in the shape of a square with irregular boundary on the

south while the rest of the sides are regular. Proposed 150’ wide IDCO road

connecting the NH-5A passes adjacent to western boundary of the site. Also

proposed parallel to the western boundary is the Haridashpur-Paradeep railway

line. The site is bounded by private/ agricultural lands on the South and by IDCO

land on all other sides.

(f) The site has a gentle and minimal slope from the west to east towards an existing

canal that runs through the IDCO land and the average slope across the site is 1:300.

The entire site is course sandy loam in nature, the details of which shall be

ascertained through geo-technical investigations. The site has no major constraints

but necessitates filling by about two feet to match the levels of the IOCL main road

7. Proposed Master Plan (a) The master plan for the park has been so designed to maximize the area under

industrial plots and the common facilities that support the industrial needs.

Accordingly, industrial plots account for 58.1% and common amenities account for

about 10.2% of the total area. The proposed land use pattern is presented as below:-

Table 2: Land Use Pattern

S. No Components Area (Acres) % of Area

1 Roads 15.43 12.9%

2 Utilities (Common Infrastructure) 10.65 8.9%

3 Common Facilities (Amenities) 12.21 10.2%

4 Industrial Plots 69.71 58.1%

5 Open Spaces/ Green Areas 12.00 10.0%

Total 120.00 100.0%


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(b) The Park is envisaged as a self-contained facility with appropriate common

facilities and social infrastructure facilities. Common amenities would consist

mainly of facilities provided in line with the requirements of the plastic park as

well as the norms applicable to such development

(c) The concept envisages a central and functional provision of common facilities in

the site along the main approach road. This would form a social node, or service

hub for the entire site effectively crystallizing the image of the Park in a single

location and to present an impressive façade from the main entry to the heart of the

Park

(d) Various infrastructure components planned for in the Park are presented in the

Table below:

Table 3: Project Components for Paradeep Plastic Park

S. No Infrastructure Components

1 Physical/ Utility

Infrastructure

Road network & Storm Water Drainage

Footpaths & Utility Corridors

Domestic & Industrial Water Supply System

Sewerage Collection System

Sewerage Treatment Plant

Solid waste Management & Plastic Waste

Recycling

Street Lighting System

Electrical Distribution System

Telecommunications

2 Support Services/

Common Amenities

Administration & Park Management offices

Service Providers’ offices

Investor services’ centre

PPEC-CIPET centre for testing & training

Design & product sampling facilities

Trade & Display facilities

Warehousing facilities/ Raw material depot

Packaging Unit

Crèche, first-aid Centre, Bank

Kitchen and dining facilities

3 Social Infrastructure Housing for managers, executives

Dormitories for Workers

4 Building for Production

Activities

Factory Buildings for Production

(e) The master plan for the proposed Plastic Park has earmarked a total area of 69.71

acres for creation of a total 80 industrial plots of various sizes as above mentioned.

The average industrial plot sizes provided for and the numbers are presented in the

table below


12

Table 4: Industrial Plot Distribution

S. No. Type of Units Nos. Area/ Unit

(Acres)

Total Area

(Acres)

1 Micro 20 0.24 4.87

2 Small scale 29 0.54 15.62

3 Medium scale 25 1.37 34.16

4 Large scale 6 2.51 15.06

Total 80 69.71

(f) However the plot sizes are intended to be kept flexible for the changing demand

and accordingly, the master plan shall ensure that different plots may either be

merged together or a single plot may be further sub-divided.

8. Project Cost and Means of Finance (a) Based on the detailed estimates for the various facilities proposed in the Park, the

cost of the components eligible under the “Scheme for Setting up of Plastic Parks”

is estimated at about Rs. 10,678 Lacs

Table 5: Project Cost Details

S. No Name of the Component Amount

(Rs. Lacs) Share (%)

1 Land (120.00 Acres) 2,160.00 20.2%

2 Physical/ Utility Infrastructure 5,101.08 47.8%

- Site Development & Compound Wall 983.32

- Road Network 1,858.55

- Storm Water Drainage 549.94

- Water Supply 244.42

- Sewerage system 114.20

- Integrated Solid Waste Management System 16.83

- Power Supply 1,149.91

- Street Lighting 108.91

- Telecom & IT Infrastructure 25.00

- Signage and Landscaping 50.00

3 Common Amenities including Equipment for

Testing/ Training/ Design facilities

2,810.61 26.3%

- Administration Complex 256.79

- PPEC including Equipment/ Plant &

Machinery

1,613.63

- Ware housing facility 418.34

- Truck Parking facility 21.48

- Workers' Dormitories and Managerial

Accommodation

500.37

4 Soft Interventions 70.00 0.7%

5 Administrative, Contingencies and Pre-operative

Expenses

259.41 2.4%

6 Design, Engineering & Supervision Fees 276.91 2.6%


13

S. No Name of the Component Amount

(Rs. Lacs) Share (%)

Eligible Project Cost (Scheme for Setting up

Plastic Parks)

10,678.00 100.0%

(b) IDCO proposes to position the project for assistance by way of Grant of 50% of

eligible components (ceiling of Rs. 40 crore) under the Scheme for Setting up of

Plastic Parks (SPP) of Department of Chemicals and Petrochemicals (DCPC),

Ministry of Chemicals & Fertilisers (MoCF), Government of India (GoI).

(c) The balance requirement is proposed to be met by equity infusion by the sponsors/

promoters, other participating entrepreneurs and term loans.

(d) The proposed means of financing for the project cost eligible under SPP is as below.

S. No Sources Amount

(Rs Lacs) % Share

1 Promoters’/ Equity Contribution 2,931.00 27.45%

2 Unsecured advance from IDCO to SPV (Land

Cost)

2,160.00 20.23%

3 Grant under Scheme for setting up Plastic Parks 4,000.00 37.46%

4 Term Loans 1,587.00 14.86%

Total 10,678.00 100.00%

9. Policy Support and Incentives (a) The industrial units will be eligible for the incentives available for Priority Sector

under Industrial Policy Resolution, 2015 of Government of Odisha

(b) Government of Odisha will support quality infrastructure in the form of a capital

grant to industrial parks/ cluster parks promoted by private sector or industry

association or user units in a cluster format, with a grant of 50% of the

infrastructure cost with a ceiling of Rs. 10 crore per park or cluster.

(c) In order to attract lead investment by a reputed investor which would promote and

facilitate further investment in the designated industrial Park/ Estate, the following

incentives shall be provided to the first tenant industry

(i) 25% subsidy on cost of land

(ii) VAT reimbursement for additional 2 years subject to the overall limit

10. Project O&M and Implementation Framework (a) The Industrial Units, Government of India and Government of Odisha through

IDCO would be key stakeholders in the Project. The Project Management

Consultant would provide the requisite techno-commercial and financial

competencies to the stakeholders


14

(b) The SPV shall enter into a Shareholders’ Agreement with all its shareholders

detailing the rights and responsibilities in relation to the shareholding and new

shareholders shall execute the “Deed of Adherence”

(c) The SPV shall enter into a Leave and License Agreement with the Units, which

shall provide rights to the Units for setting up plastic products/ parts manufacturing

facilities in the Park and also contractually bind the Units to pay all such charges

as may be levied by the SPV for the allotment, development and maintenance of

infrastructure assets and provide recourse by way of right to replace Units that have

defaulted in respect of payments to the SPV or which do not commence operations

within 6 months from the date of commencement of commercial operations of the

Park

(d) The entire implementation and O&M framework for the Project would be

documented by way of appropriate agreements and contracts as described in the

schematic diagram below:

Figure 7: Proposed Contractual Framework

Figure 8: Project Implementation Schedule (w.r.t November 2015)

Activity M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M13 M14

Bid Evaluation

and Award of

Contract for

Single Package

Tender

Site Cleaning

and Grading


15

Internal Road

Storm Water

Drainage

Water Supply

Network

Sewerage

Collection

Network

Electrical

Supply System

Common

Facility Building

11. Statutory Clearance/ Approval Status

Sl.

No.

Type of

Approval/

Clearance

Approving

Authority/

Body

Approval

Procedure Current Status

1 Government of

India (GoI)

Approval

under DCPC

Scheme for

Setting up of

Plastic Parks

Department of

Chemicals and

Petrochemicals

(DCPC),

Ministry of

Chemicals &

Fertilizers

(MoCF)

Submission of

Final Master Plan

and DPR along

with requite

documentation as

per Mega Food

Park Scheme

Guidelines

The Final Approval

has been accorded to

this project for

sanction of Grant of

Rs. 50 Crores

2 Environmental

Impact

Assessment

(EIA) Study

Odisha

Pollution

Control Board

(OPCB)

The project

requires the EIA

study to be

undertaken

Form 1 has been filed

with OPCB

The EIA study report

is under preparation

based on the ToR

issued by OPCB

3 Consent for

Establishment

State Pollution

Control Board

The project

requires an

application to be

made through

Form IV (A) (a) to

the State Pollution

Control Board for

obtaining the

Consent for

Establishment

Clearance for both

air and water

Process under

execution for filing the

Application with the

concerned authority


16

Sl.

No.

Type of

Approval/

Clearance

Approving

Authority/

Body

Approval

Procedure Current Status

4 Power CESU The Project

requires

application under

Consumer

Category - Allied

Agro-industrial

Activities category

to CESU through

Form No.-2.

Approval has been

received from CESU

for 500 KVA

substation(construction

power requirement)

and for 2 x 8MVA

33/11 KV substation

12. Project Impact (a) The Plastic Park will directly benefit the Plastic sector in the State of Odisha and

all other major industrial verticals like agriculture, infrastructure, automobile,

construction, consumer goods, telecommunication, packaging, healthcare etc in

Odisha will stand to benefit from savings on transportation and other costs due to

the availability on demand of necessary plastic parts from the units to be setup in

the proposed Plastic Park

(b) Further the proposed Plastic Park shall be a stepping stone for the development of

the Paradeep PCPIR

(c) The Park will create the potential for harnessing local entrepreneurship,

consequential growth of secondary and tertiary sectors in the area in general and

around the project site in particular

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